Corporate net zero targets – empty marketing promises or clever future strategies?

Monday, May 24, 2021

The growing popularity of net zero claims has boosted demand in the voluntary carbon market, but also gained criticism. The key to understanding the trend is in asking the right questions.

More than a fifth of the world's largest corporates have committed to net-zero targets, and many countries and cities across the world have joined the quest. Some leading scientists and activists criticize the concept for relying too much on future carbon capture technology, and for not placing enough emphasis on emission reductions. Shell, American Airlines, and Ford Motor Company are examples of companies that aim to reach carbon neutrality by 2050, but critics say that’s too late. The climate crisis needs to be addressed now.

“Relying on future technology is not very responsible. Also, the growing popularity of net zero has increased the demand for carbon credits, which is slightly problematic because with the current standards it is extremely difficult to make credible net zero promises. I wouldn’t feel comfortable making these claims without significant overcompensation,” says Niklas Kaskeala, our Head of Sustainability.

Net zero is achieved when the amount of emissions removed from the atmosphere is the same as the amount that is added. Overcompensation means buying more carbon credits than would technically be required to compensate for the emissions, to ensure the desired impact.

According to Kaskeala, the net zero framework itself is neither good nor bad, but it can be misused. The emphasis should always be on minimizing and reducing emissions and carbon offsetting should always be the last option. Therefore it is extremely important for an organization to be transparent about how they are going to reach their targets.

“It is crucial to ask the right questions. Are both direct and indirect emissions included and how are the claims achieved; locally and within the value chain or by supporting carbon removal somewhere else? It is a lot more complex than it looks, and marketing often simplifies things a bit too much,” Kaskeala says.

 

Transparency is key

The first thing for a company to do when deciding to tackle its emissions is to map and calculate its current climate impact. All companies are different, but the main cause of emissions is usually electricity, and buying it from a renewable energy source is likely to lower the corporate carbon footprint. Travel can sometimes be a huge emission source.

When a company is aware of its impact, it can first avoid, then minimize, and thirdly compensate its emissions. In theory, a company can achieve net zero straight away, but offsetting should only be used as a temporary tool as actions are taken to reduce emissions in the value chain.

“Compensation can be a useful tool in reaching net zero. However, the ultimate target should be to become carbon negative, and net zero is one step towards that,” says Kaskeala.

There are inspiring examples of forward thinking corporates that are committed to making a real difference, and Kaskeala mentions a few. He really liked how the social advertising agency and our partner, Smartly, was very clear about the roles of reductions and offsetting when communicating about their path to becoming carbon neutral.

“It’s not just about putting a climate neutrality stamp on everything, it’s about opening up the targets, and they did a good job at that. We worked with The London School of Economics and they also took a very thorough approach to reducing emissions and then offsetting what is left. They have set their level high when compensating,” says Kaskeala.

In 2020 Microsoft announced that they will commit to removing as much carbon from the atmosphere as the company has emitted in the 45 years of its existence, thus taking responsibility for their carbon debt in total. 

“Imagine if more people and companies started acting in a similar way, not only taking responsibility for their actions in this moment, but in the past too. That is a whole new mindset,” Kaskeala says.


Ready to start your corporate journey to carbon negative? Our Compensate Plus service helps you understand your business’ emission, and then take action to offset them. Sign up for your free 14 day trial here .

The net zero framework itself is neither good nor bad, but it can be misused. It is extremely important for an organization to be transparent about how they are going to reach their targets.

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